WTO probes EU screw duties
By Bradley S. Klapper |
October 26, 2009, Monday
|
Print Edition
Print Edition
THE World Trade Organization has opened an investigation into whether European Union charges on imports of Chinese steel fasteners comply with international commerce rules.
China argues that the EU is illegally taxing steel fasteners needed for products from furniture to cars, but the 27-nation bloc says Chinese manufacturers are breaking trade rules by selling a flood of screws at 30 percent to 50 percent below European prices.
Brussels passed on a chance to delay the probe, saying it is "strongly convinced of the strength of its case."
In another proceeding at last Friday's WTO dispute meeting, the EU blocked until at least next month a United States complaint about European barriers to American poultry. The US, meanwhile, delayed the establishment of a panel to look into a complaint by Canada and Mexico about country-of-origin requirements for cattle and hog imports.
The EU and China held negotiations in Geneva last month that failed to break the deadlock over the screw dispute, and heavy lobbying by Chinese screw makers earlier this year also had little effect.
In January, the EU slapped Chinese exporters with trade charges ranging between 26.5 percent and 85 percent for five years, arguing that below-cost selling by Chinese companies prevented European producers from gaining extra market share as sales boomed in recent years.
Action unfair
Governments investigate dumping when they suspect foreign producers are exporting goods at artificially low prices - usually as a result of subsidies or to corner a market.
But China argues that the action unfairly penalizes the commercial interests of over 1,700 Chinese fastener producers.
Chinese screw makers complained in February that the EU's actions would hurt consumers without helping European producers. Manufacturers from Jiaxing in Zhejiang Province in eastern China - representing a quarter of Chinese screw exports - say they are unfairly being singled out because they charge the same or more than rivals based in Malaysia, Vietnam and India.
The WTO cannot force countries to comply with its rulings, but it can authorize commercial sanctions against nations continuing to break the rules. Trade cases generally take years to reach that point.
The US-EU poultry dispute was launched by the US in the final days of ex-President George W. Bush's administration.
China argues that the EU is illegally taxing steel fasteners needed for products from furniture to cars, but the 27-nation bloc says Chinese manufacturers are breaking trade rules by selling a flood of screws at 30 percent to 50 percent below European prices.
Brussels passed on a chance to delay the probe, saying it is "strongly convinced of the strength of its case."
In another proceeding at last Friday's WTO dispute meeting, the EU blocked until at least next month a United States complaint about European barriers to American poultry. The US, meanwhile, delayed the establishment of a panel to look into a complaint by Canada and Mexico about country-of-origin requirements for cattle and hog imports.
The EU and China held negotiations in Geneva last month that failed to break the deadlock over the screw dispute, and heavy lobbying by Chinese screw makers earlier this year also had little effect.
In January, the EU slapped Chinese exporters with trade charges ranging between 26.5 percent and 85 percent for five years, arguing that below-cost selling by Chinese companies prevented European producers from gaining extra market share as sales boomed in recent years.
Action unfair
Governments investigate dumping when they suspect foreign producers are exporting goods at artificially low prices - usually as a result of subsidies or to corner a market.
But China argues that the action unfairly penalizes the commercial interests of over 1,700 Chinese fastener producers.
Chinese screw makers complained in February that the EU's actions would hurt consumers without helping European producers. Manufacturers from Jiaxing in Zhejiang Province in eastern China - representing a quarter of Chinese screw exports - say they are unfairly being singled out because they charge the same or more than rivals based in Malaysia, Vietnam and India.
The WTO cannot force countries to comply with its rulings, but it can authorize commercial sanctions against nations continuing to break the rules. Trade cases generally take years to reach that point.
The US-EU poultry dispute was launched by the US in the final days of ex-President George W. Bush's administration.
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